Could someone explain to me the theory behind why every bucket in a ranking system whose universe is the S&P500 would have a better 10 year performance than the index itself.
I would think at least one of the buckets would underperform.
Dividends I think. The SP500 bucket isn’t going to count them, whereas all the other buckets do?
I suppose that could be it. Wish there was a benchmark that included dividends
The S&P 500 index is market-cap weighted. The stocks are equal-weighted.
Steve
It’s the equal weight thing. The best benchmark is an equal weight index which has just been made available! See this thread .